Here at DC Inno, we're looking ahead at 2016 and for the storylines, companies and entrepreneurs that have the potential to make big moves and break headlines. Maryland's tech startup ecosystem, different from it's neighbors in the District and Virginia, is quickly changing and growing in its own right.
Specifically, Maryland is home to a burgeoning set of health-tech, cybersecurity and cloud data service companies with great potential. This year, for example, brought the $1.2 billion dollar acquisition of data visualization firm Virtustream, which was also backed by a number of prominent local venture capital firms. In preparing for a new year, here are some of the top Maryland startups we're watching in tech:
ZeroFox (Baltimore, Md.)
- Investors: Highland Capital Partners, New Enterprise Associates, Genacast Ventures and Core Capital
- What they do: social media cybersecurity and threat intelligence platform
- Why they are worth watching: in early December, cybersecurity startup ZeroFox scooped an impressive $27 million Series B funding round. The money will be used primarily to accelerate sales by helping hire more sales professionals and in assisting new product development efforts. ZeroFOX CEO James Foster told the Baltimore Sun at the time, "I think our investors want to see more value and really unleash the value of the company. The full expectation is we're on to something here that's significant and meaningful, and they want to give us enough room to run." Going into 2016 with fresh funding and renewed confidence from prominent local VC firms Core Capital and NEA, ZeroFox will aim take the next steps toward becoming Baltimore's premier cybersecurity franchise.
Localist (Silver Spring, Md.)
- Investors: undisclosed
- What they do: a unique event technology company that develops white-label, marketing-centric calendar software
- Why they are worth watching: having only raised a small seed round of $300,000 in 2009 from unnamed angel investors, this startup has been self-supported for most of its existence. Localist was long based in Baltimore and was an original member of charm city's once burgeoning tech startup scene. But over the course of several years, CEO Mykel Nahorniak (pictured) told DC Inno that he found Baltimore’s lack of developer talent and its “fragmented” incubator scene, among other things, to be red flags. He chose to relocate to Silver Spring, just a stone's throw from D.C., to be closer to a larger developer talent pool.
BrainScope (Bethesda, Md.)
- Investors: Maryland Venture Fund, Revolution co-founder Steve Case
- What they do: a health tech company that develops hand-held, non-invasive tools to assess the brain functions. Used by sports medicine doctors for a variety of head injuries
- Why they are worth watching: former AOL President Steve Case and his venture capital firm Revolution made a rare investment in BrainScope (rare given that their portfolio is not health-tech centric) along with the Maryland Venture fund, to see that this startup can succeed. They are also supported by the NFL in partnership with GE to establish an innovative solution to scan for concussions, BrainScope received a $500,000 award as part of a "head health challenge" earlier this year.
Luminal (Frederick, Md.)
- Investors: NEA, Core Capital, Maryland Venture Fund, JHC Ventures
- What they do: building an infrastructure-level operating system for deploying and managing cloud-based workloads
- Why they are worth watching: this company moved from West Virginia to Frederick in 2014 after attracting support from the Invest Maryland initiative authored by then governor Martin O'Malley. They've raised capital, introduced several new products and have consistently received praise from private equity investors. In November 2014, Luminal announced its first product, Fugue, at AWS re:Invent. “Fugue is immutable infrastructure realized,” Luminal CEO Josh Stella previously told DC Inno. The system fully automates the deployment, operations and maintenance of infrastructure on Amazon Web Services—with the result being higher performance and lower cost. Earlier this year, in January, Luminal launched the beta-version of Fugue. A spokesperson recently told DC Inno that the Luminal will soon change their name to Fugue.
Visisonics (College Park, Md.)
- Investors: Dingman Center Angels
- What they do: audio software and hardware developers for virtual reality applications and headsets
- Why they are worth watching: in October 2014, VisiSonics became the first 3D Audio engine licensed by Oculus, the virtual reality technology company owned by Facebook who is best known for creating the Oculus Rift. The company licenses its software to game and application developers who hope to create a more realistic 3-dimensional world with the Rift. Given that the commercial version of the Rift is finally set to launch in Q1 of 2016, Visisonics will be an active participant in the evolving VR developer market.
IronNet Cybersecurity (Fulton, Md.)
- Investors: Trident Capital Cybersecurity
- What they do: "integrated, end-to-end approach ... that offers breakthrough, patent-pending technology, providing real-time threat assessment and updates, complex behavioral modeling, big data analytics and proactive responses, along with comprehensive consulting and training services."
- Why they are worth watching: retired four-star general and former NSA Director Keith Alexander's Fulton, Md.-based cybersecurity startup, IronNet Cybersecurity, raised $32.5 million earlier this year. This quiet cybersecurity firm is led by Alexander (pictured), alongside Matt Olsen, formerly the Director of the National Counterterrorism Center; Brett Williams, former Director of Operations at U.S. Cyber Command; and George Lamont, former Director of Exercise and Training at U.S. Cyber Command.
M3D (Fulton, Md.)
- Investors: crowd funded via Kickstarter
- What they do: ultra-compact 3D printer developer
- Why they are worth watching: M3D finally started shipping their Micro 3D-printers this year, while also adding a retail version, after raising $3.4 million from nearly 12,000 people in 2014 via Kickstarter. The M3D team is full of recently graduated UMd. students, as the startup was born from the University of Maryland's Startup Shell incubator. As time progresses and this startup matures they will serve as another case study of how Kickstarter funded companies develop. "[M3D] ... is well-positioned to grow into the casual and educational 3D-printing markets, bringing the possibilities of 3D-printing to a far larger audience than ever before," Eric Schwartz previously wrote.
RackTop Systems (Fulton, Md.)
- Investors: undisclosed
- What they do: focused on easy to use and affordable cloud storage software, devices and services.
- Why they are worth watching: in July 2014, neighboring Montgomery county pushed $12 million in tax rebates to companies willing to keep their data in Silver Spring-based data centers owned by ByteGrid Holdings. The state of Maryland's commerce department has equally made it a focus to understand the value and opportunity that cloud data storage companies hold. Earlier this year, Racktop Systems raised $1.5 million from undisclosed investors. This company offers a one-stop-shop for customer’s who want to migrate their data to cloud storage options. RackTop offers data integrity and security solutions through multi-layered encryption. "RackTop is entering the next phase of growth," CEO and co-founder Eric Bednash previously told DC Inno. Could Racktop Systems be the next investment target for the state's VC arm, the Maryland Venture Fund? The fit would make sense if the company can continue to grow.
Brivo Systems (Bethesda, Md.)
- Investors: Duchossios Group
- What they do: Internet of Things (IoT) security company
- Why they are worth watching: Brivo Systems was acquired by Eagle Eye Networks CEO Dean Drako for $50 million earlier this year. Drako now serves as the chairman of the board at Brivo. Drako is the founder and former CEO of data storage and IT security company Barracuda Networks. He currently runs Texas-based Eagle Eye Networks, which is a cloud-enabled video surveillance security company founded in 2012. Drako's plan is to partner the technologies developed by Brivo and Eagle Eye together, according to an interview with DC Inno. Goldman Sachs previously called Drako one of the “100 Most Intriguing Entrepreneurs of 2014.” According to Brivo, its cloud-based access control systems are currently used by more than 6 million users in over 100,000 access points. The company and its employees remain based in Bethesda.
Bricata (Columbia, Md.)
- Investors: Maryland Venture Fund
- What they do: cloud infrastructure cybersecurity
- Why they are worth watching: Bricata was crowned the winner of the Defense & Security category in the 2015 InvestMaryland Challenge earlier this year. As a result, they won a $100,000 state grant and an Army Research Lab Incubator Opportunity from the state of Maryland. The catch was that they needed to move to Maryland from their previous headquarters in Vienna, Va. Since then, Bricata Systems has relocate to Columbia, Md. At the time of their win, Bricata CEO and co-founder John Trauth told DC Inno that the funding would be used to hire a larger staff, sign an office lease and further develop Bricata Threat Exchange (BTX). Since the company was poached from Virginia's hyper competitive cybersecurity corridor it will be interesting to follow how Bricata adapts to a new home and if more companies will follow their path.
